A Financial Rescue in America

Most countries have three choices when they face financial crisis: self-protection, crisis export or look for a new growth engines. We can analyze American financial rescue after the 2008 global financial crisis in the three respects:

(1)  Self-protection. After the Subprime Mortgage Crisis, America put it in the first place, to expand the relief range and extend the relief time. The core of self-protection is to strengthen the social security. In 2009, the cost of  retirement pension ,social welfare and medical care account for about 56% in the total costs in the US federal and state and local governments. Another important measure of self-protection is to cut tax. For enterprises, it can help them to survive and invest  to provide more jobs to the society. For individuals ,it can help to stimulate consumption and improve their anti-crisis ability. The scale of tax cuts is huge and generous. In October in 2008, January and September in 2009 ,December in 2012,the government t passed about 1520 ,3000 ,2000 and 8580 billion dollars tax cuts plans for enterprises and individuals which all benefits the middle class in America.

(2)  Crisis export. The keystone of American economic stimulus plan is the huge tax-cut plan. This is mainly achieved by issuing us dollar, bond and start the trade war. In March 18 in 2009, the Federal Reserve announced to purchase 3000 billion US national debt and 7500 billion mortgage securities. Until June in 2011, the Federal Reserve has purchased 6000 billion US bonds to stimulate the recovery of economy. More ,the government established polices to encourage the consumption of products made in USA and strengthen the trade barriers against China. In addition, American contracts loans all over the world, then to dilute these loans debts by weak dollar policy. Until  January 2011,the total amount of U.S. Treasury bonds has reached 14056 trillion dollar, which is close to upper limit of the official national debt for 14.3 trillion dollar.

(3)  Looking for a new growth engines. The key approach to motivate the economy is to look for a new growth engines. The policy made by government in this aspect is explicit which is to develop new energy and increase investment in research. The government allocated a lot of money in this area to become leader.